The Commission's investigation confirmed that in all markets the combined entity would continue to face competition from several strong competitors, notably British Airways and American Airlines.

Delta and Virgin Atlantic's non-stop services overlap on the London-New York and London-Boston routes. In addition, Delta's one-stop services overlap with Virgin Atlantic's non-stop services on several routes between the UK and North America.

On each of the transatlantic routes where both Virgin and Delta operate, sufficiently strong players – in particular British Airways and American Airlines, which joined forces in a joint venture - are present and capable of exercising a significant competitive constraint on the combined entity. Moreover, Delta and Virgin are currently not particularly close competitors, but primarily compete against British Airways and American Airlines.

Delta still needs approval from the US Transportation Department, which it hopes to get later this year.

Given that the UK benchmark has given up what was recently a ‘buy on the dips’ level, any relief rally will run into trouble at what is now probable resistance. The big question now is whether we are in for a watershed moment in equities. Investors have spent May scanning anxiously for signs that the rally is over, but Federal Reserve chairman Ben Bernanke may just have fired the starting pistol on a wave of selling that might go on for weeks. Today’s market action was like a day out at Alton Towers only with more spills than thrills and a plethora of nauseating effects. Stocks in the green were few and far between with only Lloyds managing to hold firm on the day (and only barely) as plans to return the bank into private hands get underway.

16.51 After a horrible day for stock markets, dealers can finally take a breather. Trading has come to a close in London, and the FTSE 100 has tumbled 3pc, or 189.31 points, to 6,159.51. That takes the index to its lowest level since January and its biggest one-day fall since September 22, 2011, when it dropped 4.7pc. The Dow Jones Industrial Average is currently down 1.4pc in the US, while French, German and Spanish stock markets are all sharply lower.

16.49 Meanwhile, the former boss of Enron is another step closer to being released early from prison.

Jeffrey Skilling was jailed for 24 years and four months in 2001 for his part in one of the largest fraud scandals in US history. But Mr Skilling's lawyers will ask on Friday that his sentence be reduced to around 14 years if he drops all remaining appeals. Here's CNBC with more:

Under the proposal to be presented to Lake, Skilling's 24-year, four month prison sentence—one of the longest ever at the time in a white collar case—would be reduced to around 14 years. With credit for time served and for good behavior, Skilling could be out of prison in 2017. At that point, he will have served a little over 10 years.

In exchange, Skilling would drop all remaining appeals, including a potentially explosive motion for a new trial based on alleged misconduct by the Justice Department's elite Enron task force that prosecuted the case. Skilling's convictions on 19 criminal counts including conspiracy, fraud and insider trading would stand. What's more, $40 million that Skilling had agreed to forfeit if his appeals were unsuccessful would be turned over to victims.

As promised, Tumblr will continue to operate as a separate business, led by David Karp as CEO. Their product roadmap, their team, and tone will all remain the same as will their mission to empower creators and curators alike to do what they love best: create.

David and his team are redefining creative expression online, and we can’t wait to see what they come up with next.

16.00 Market bloodbath update:

FTSE 100 in London: -3pc

CAC 40 in Paris: -3.2pc

DAX 30 in Frankfurt: -3.15pc

FTSE Mib in Milan: -3pc

IBEX 35 in Madrid: -3.4pc

Dow Jones in New York: -1.4pc

S&P 500 in New York: -1.6pc

Traders work at the New York Stock Exchange in this file photo (Photo: AP).

15.50 Commenting on the data, Amna Asaf at Capital Economics, said:

[Today's data] contrast with the message from June's Empire State index (released on Monday) and together the two regional surveys suggest that the ISM manufacturing index may not have improved much from the sub-50 reading in May. We expect the manufacturing sector to continue to struggle from soft global activity. While the recession in the euro-zone is easing, activity in China has continued to slow. Indeed, the national US Markit PMI (also released today) was broadly unchanged for the third month in a row at 52.2 in June, down from 52.3 in May.

15.36 Better-than-expected US manufacturing data have failed to lift markets.

The US Philly Fed manufacturing survey rose to a two-year high of 12.5 in June, from May's reading of -5.2, as new orders jumped.

However, the survey showed that employers are still reluctant to hire staff, while the inventories index fell to -6.6 in May, from +4 in April. The number represents the balance of positive and negative responses.

While the survey is a regional one, the index is closely watched for clues as to how the rest of the world's largest economy is performing.

&lt;noframe&gt;Twitter: deltahedge - DIJSSELBLOEM SAYS CYPRUS MUST BE ABLE TO PAY BACK LOANS&lt;/noframe&gt;

Dutch finance minister and eurogroup head Jeoen Dijsselbloem

15.16 Developing economies are among those which could fare worst from the Fed "turning off the taps". World Bank President Jim Yong Kim admitted there was "deep, deep concern" about the implications for developing countries' access to capital, but said his bank would be ready to provide funding to keep these economies growing.

14.57 Missed this earlier. Slovenia, the nation widely expected to be the next target of a eurozone bail-out, has cut its official growth forecast to predict a deeper contraction this year and an extension of recession into 2014.

The government predicted a 2.4 contraction in GDP this year, more than the 1.9pc of earlier estimates. It also reversed its forecast for 2014, saying the economy would likely shrink 0.2pc instead of growing 0.2pc.

Slovenia is hoping to avoid bail-out from the EU through aggressive cost-cutting measures and a restructuring of its heavily indebted banking sector. Its prospects of doing so without external help were cast into doubt following the Cyprus bail-out when it came perilously close to being locked out of the bond markets. But its borrowing costs have since retreated.

14.55Olli Rehn, the EU's top official for economic and monetary affairs, has all but confirmed that the Cypriot President's plea for a reworking of the tough bail-out conditions will be ignored. Asked about Nicos Anastasiades' demands ahead of the eurogroup meeting, Mr Rehn simply said:

We have just recently agreed the programme for Cyprus and we will work on the basis of that programme.

14.25Kathleen Brooks of Forex notes that, although for the last month rising yields have not corresponded to a rising dollar, that relationship seems to have broken in the last 24 hours.

14.33 It's been a weak start to trading in the US, where the Dow Jones Industrial Average has dropped a further 0.9pc, or 135 points at the open, adding to the fall it suffered yesterday. The FTSE 100 is still down 2.4pc.

14.15 More signs that the US is still far from a steady economic recovery.

Latest survey data on the manufacturing sector showed growth in the sector slowed in June. Markit said its preliminary gauge of manufacturing activity gave a reading of 52.2, down from 52.3 and well below analysts' expectations of 52.7. While, coming in over 50, this still indicates growth, the pace is slowing.

14.02 There's less than half an hour to go before the US stock market opens, which is likely to provide the FTSE 100 with its direction of travel for the rest of the afternoon. The benchmark index is currently down 2.4pc, following the 1.6pc fall in the Dow Jones Industrial Average last night.

13.58 Closer to home, 300 British jobs have been put on the line after upmarket furniture retailer Dwell said it was calling in the administrators. It is reported to be close to appointing Duff & Phelps as administrator. In a statement, the company said:

The business had been working with its advisers to secure further working capital for the business and was actively in the process of talking to a number of interested parties who saw the value of the Dwell brand and product, its customer base and its multi-channel proposition.

However, despite this interest it did not progress. As a result we have been left with no option but to close the business with immediate effect.

13.54 A spot of bad news for the US economy has, in the strange and startling world of QE-addiction, reeled in US Treasury yields from a near two-year high. Latest weekly figures on new jobless claims in the US - the number of newly unemployed people- came in at 354,000. Analysts had expected a figure of around 340,000.

The yield on 10-year US Treasury notes pared back to 2.39pc, after rising as high as 2.47pc, the highest level since August 2011.

13.37 Spain picked the wrong day for a bond auction. Today, it raised €4bn by selling three bonds, after its 10-year yield jumped more than 30 basis points to around 4.83pc. While this is still well below the 7.6 peak prior to the ECB's bond-buying pledge, it is a worrying sign for a country which relies on the bond markets to meet its funding needs.

Speaking to Reuters, Nick Stamenkovic of RIA Capital Markets warned that today's jump in bond yields may not quickly be reversed:

Investors are staying away from (euro zone) periphery and carry trades at the moment. With all that's going on in the States, at least in the near term, Italian and Spanish bonds are likely to struggle.

13.18 And what of the emerging markets, which have been among the greatest beneficiaries of the Fed's aggressive easing of recent years? MCSI's emerging markets index, which tracks equities in the emerging countries of Europe, the Middle East and Africa, fell 4.7pc. Turkey's Istanbul stock exchange is down more than 4pc.

Speaking to Reuters, trader Maarten Jan Bakkum, warned that today's moves are just the beginning.

Currencies have also been hit, with the Russian rouble falling moret han 1pc to the dollar. The Turkish lira hit an all-time low, whilet he Polish zloty hit a one-year low against the euro.

12.28 But returning to the story of the day - the great global market sell-off. Ambrose Evans-Pritchard notes in his blog that the combination of imminent tapering by the Fed and a refusal of the Chinese central bank to run to the rescue of its liquidity-starved banks, is a "synergy of nastiness" for the markets.

The term "Perfect Storm" is banned by the Telegraph as a lamentable cliché, so let us just say that this is the moment we long been fearing or waiting for – depending on taste – when markets are no longer given what they want.

The Bernanke Put has become the Bernanke Call. The Politburo Put has become the Politburo Call. Rather than putting a floor under asset markets whenever there is trouble, they are instead putting a roof on asset price rises.

It is hard to know which matters most right now: the PBOC or the Fed. It is certainly a synergy of nastiness.

What we do know is that the start of Fed tightening is a dangerous inflection point for those markets and countries around the world that relied on the flood of dollar liquidity.

The whole process that flattered their profiles for so long is going into reverse, and it is happening just as the most overextended – Brazil, South Africa, Turkey, Serbia, to name a few – have exhausted their own internal credit cycles. This is where we can expect the stress to appear. The real is down to 2.21 to the dollar today. I see they are already talking about 3 to the dollar at O Globo. Querido Deus.

12.24 But the eurogroup are optimistic that they will round up talks on the direct recapitalisation rules today, according to Reuters citing a eurozone official.

The direct recapitalisation, or common resolution mechanism, rules will lay out the terms for a eurozone bail-out fund to inject capital into struggling banks, and constitute a key cornerstone for banking union in the single currency bloc. Up until now, crisis-ridden banks have only been recapitalised indirectly via the government of the member state concerned.

12.17 As eurozone finance ministers gather in Brussels to thrash out details of the direct bank recapitalisation rules today, Italy's new prime minister Enrico Letta voiced his concerns over delays to achieving the first pillar of a banking union - establishing the ECB as the bloc's single supervisor.

The date for passing laws granting the ECB powers to become the single supervisor for eurozone banks will likely be pushed back three months due to a hold-up in getting the legislation passed in the German parliament. Now, Mr Letta has questioned whether the second pillar of banking union - a common resolution mechanism, due to be discussed by the eurogroup today - will face a similar fate.

If we don't discuss a common resolution of banks in crisis at the next meeting I have a feeling that the December 2013 deadline for this will also not be met.

Enrico Letta, prime minister of Italy, has questioned some of his peers' commitment to banking union. Photo: AFP/Getty Images

12.03 The fall in the FTSE 100 has steadily worsened, with the blue-chip index down 2.4pc, or 152 points at 6,196.

11.58 Here's ex-UBS trader Tom Hayes leaving Westminster Magistrates Court, where he appeared to hear the eight charges brought against him by the Serious Fraud Office. Mr Hayes is accused of conspiracy to defraud in connection with a global investigation into the Libor interest rate rigging scandal.

Photo: Reuters

11.50 The Financial Times' Gavyn Davies writes in his blog that while bond yields have clearly reacted swiftly to indications the Fed's asset purchase programme could taper soon, that it this is unlikely to descend into a bear market. The reason, he says, is that the economic conditions don't yet exist to justify a tapering of asset purchases on the Fed's own terms - Mr Bernanke repeated his pledge of December last year that QE3 will only wind down when the unemployment rate drops below 6.5pc.

He uses this chart from Fulcrum Asset Management to illustrate the point, where the dark circle represents conditions consistent with a healthy labour market, and the origin indicates the worst levels reached during the recession. The red line shows how the various measures fared when QE3 was announced in September, and the blue line shows the latest readings.

11.29 Edward Hadas, economics editor at Reuters Breakingviews, explains the situation in China in this video. He reckons the People's Bank of China is merely conducting a very controlled experiment. It can afford to keep the banking sector on its toes since it has much more control over the financial system than its Western equivalents. As Mr Hadas says, the PBOC is "unlikely to let the Lehman moment happen in China".

11.25 It's not all doom and gloom out there in London's stock market, particularly on the mid-cap FTSE 250, where there are some bright spots for investors. Clothing retailer Ted Baker has jumped 13.1pc on an encouraging trading update, in which it posted a 32.7pc increase in revenue for the 20 weeks ending June 15. Machinery rental group Ashtead has risen 4.6pc on well-received annual results and Dixons, the electroncis retailer, has gained 4.3pc on the back of its own full-year numbers. Inter-dealer broker Tullett Prebon is also 2pc higher, boosted by an upgrade to "buy" from "neutral" at heavyweight broker Goldman Sachs. The FTSE 250 itself is down 1.9pc, or some 265 points.

11.14 All the action in global markets would make it easy to forget the drama unfolding in China, where the central bank's refusal to inject more liquidity into the system has seen interbank lending grind to a halt.

This is a problem because, as Ambrose explains in his blog, more than half of the $2 trillion in wealth management products - described by Fitch as a second hidden second balance sheet of the banks — has to be rolled over every three months.

The People's Bank of China in Beijing. Photo: Bloomberg

11.04US Treasury yields spiked this morning, hitting their highest in almost two years. At last check the yield had hit 2.438pc.

Ben Bernanke has put the cat well and truly among the pigeons with his statement that asset purchases would begin slowing by the end of this year. It does feel as if the Fed chairman has pulled the rug from underneath the stock market rally, and he certainly seems to have dealt a killer blow to gold.

Mr Bernanke might have said that the Fed wasn’t looking to apply the brakes on easing, but he certainly had that effect on stocks. The US economy might be getting better but this will be cold comfort for investors today. Until the dust settles, it is hard to say where the latest bout of selling will end.

Ben Bernanke "has put the cat well and truly among the pigeons" according to IG trader Yusef Heusen. Photo: Getty Images

10.50 Earlier we got some encouraging economic data from Germany and France. In Germany, private sector activity picked up slightly in June, while in France, the private sector's decline slowed right down.

So perhaps it comes as little surprise that the overall eurozone private sector figures show signs that the slowdown is mellowing. The Markit PMI, a key gauge of activity in the combined manufacturing and services sectors, came in at 48.6, up from 47.2 in May. While this is still below the 50 mark dividing growth from contraction, it is the highest reading in 15 months.

At this rate, the region could stabilise in the third quarter and return to growth in the fourth quarter.

It is particularly welcome news that the rate of decline outside of France and Germany has slowed sharply in recent months, and is now the weakest for two years. The rate of contraction has also slowed sharply in France, while Germany is showing signs of faster, albeit still modest, growth.

Euro area policymakers will no doubt be encouraged by these improving indicators, suggesting the ECB will see no need for any further action in the near term.

10.45 Good timing from analysts at Bank of America Merrill Lynch, who have released a note modelling the impact of lower gold prices on London-listed miners. They said:

We stress test free cash flow under a $1200/oz scenario, and believe that African Barrick, Hochschild and Petropavlovsk could struggle to maintain their current level of cash dividends.

Shares in Petropavlovsk are down 8pc, the biggest faller on the FTSE 250, Hochschild is 4.2pc lower and African Barrick Gold has lost 4.2pc.

The Fed's $85bn-a-month asset buying programme has largely focussed on government bonds. Therefore once the taps are turned off, demand, and prices, will fall sharply. The other effect of the Fed's QE3 has been to pump an enormous amount of liquidity into markets, liquidity which has served to keep all asset classes artificially buoyant. Once this flow is stemmed, there'll be less cash around to invest.

Investors were holding their breath yesterday on the hope that Fed chair Ben Bernanke would bow to their wishes and avoid calling time on QE. As Ambrose said prior to Mr Bernanke's comments:

Investors seem to think he will indeed blink, or at least blink enough to put off the day of reckoning for another three month investment cycle, which is what hedge funds care about, and that if he doesn’t blink it will be because the economy is picking up speed. They cling to the Bernanke Put, when the new reality may instead be the Bernanke Call.

Perhaps Bernanke will oblige one more time, knowing that the US economy has yet to absorb the full shock of fiscal tightening, the biggest squeeze for half a century. Besides, core PCE inflation is down to 1.1pc. Jim Leaviss from M&G says the Fed would normally be cutting rates by 1.5pc under the Taylor Rule in these circumstances, not tightening.

But, as we now know, Mr Bernanke did not blink.

10.33 This chart, tracking the spot gold price over the last three days, illustrates gold's rather astounding tumble this morning:

Source: Reuters

10.10 The US dollar is one of the only assets that is enjoying a boost from a QE wind-down. The Fed's asset purchases have massively increased the supply and weakened the value of the dollar, so any tapering of this activity will have the opposite effect.

09.55 Market analyst Michael Hewson of CMC Markets notes that UK retail sales have shown a lot of volatility in recent months. It's worth noting that the figures do not quite charm with household income, which has is increasingly squeezed as wages lag inflation.

09.43 In the midst of the market sell-off, a bright piece of news from the UK economy, where retail sales rebounded strongly in May, rising 2.1pc. That's the figure for the value. The quantity of goods bought rose 1.9pc, to hit a record high. The main drivers were discounting at supermarkets and more growth in online shopping, according to the ONS.

09.28 Gold has pared back some losses and has returned to around $1314/oz.

09.24 Let's not forget European stock markets, which have fallen in line with the UK, US and Asia. The Cac 40 in France is down 2.1pc, Germany's Dax is off 2.3pc and the Spanish Ibex index is 1.4pc lower.

09.18 Now gold is at its lowest since October 2010.

09.16 The slide in the FTSE 100 has worsened now, with London's benchmark index off 2.1pc, or 130 points, at 6,218. Hit by the falling gold price, shares in the precious metals miners have tumbled. Randgold Resources is down 5.5pc, the heaviest decline on the blue-chip index, Fresnillo has lost 4.5pc and Polymetal International is down 4.3pc.

09.03 Gold's freefall is part of the wider picture we're seeing in markets today. Yields on governmenet bonds are also spiking.

08.58 Gold is falling further - now around $1314 per ounce.

08.54 Gold has taken a spectacular tumble this morning to an two and a half year low, following Ben Bernanke's strongest signal yet that QE3 is coming to an end. Its currently hovering around $1318 per ounce.

08.41 Meanwhile in Germany, a key survey of businesses indicates that the manufacturing and services sectors picked-up incrementally in June, but not enough to significantly boost GDP growth in the second quarter. Markit's gauge of private sector activity came in at 50.9 in June from 50.2 the previous month, where any reading over 50 indicates growth.

08.35 Shares in Lloyds Banking Group are the only FTSE 100 riser at the moment, up 0.2pc on news the lender will not have to sell shares to meet new capital requirements. But mining stocks are down across the board on the back of the disappointing economic news from China, the world's largest consumer of industrial metals. BHP Billiton is off 3.6pc, Antofagasta is 3.4pc lower and Vedanta Resources has declined 3.2pc.

08.33 A rare helping of good (or at least not bad) economic news for France. While activity in the private sector fell June, the pace was slower than expected, mostly due to an improvement in manufacturing.

The thought of QE / Methadone withdrawal appears to be hitting the markets, with shakes and shivers after the Bernanke press conference. The FOMC statement was anodyne, with slightly improved economic forecasts with regards to 2014 growth and unemployment rates. However, in the press conference, Bernanke highlighted that the pace of QE would ease as the unemployment rate headed towards 7pc.

If economic growth does accelerate then the unemployment rate may fall further and faster than currently expected, which may bring forward not only tapering, but also the consideration of the trauma of rate increase by the Federal Reserve, a trauma for the market we suggest.

08.07 The FTSE 100 has followed US and Asia markets lower this morning and is down 84 points, or 1.3pc, at 6,264. Not a single share rose on the benchmark index in early trade.

08.04 There's been quite a bit of board reshuffling this morning, too. Compass has confirmed the appointment of Paul Walsh, the former Diageo boss, as chairman replacing Sir Roy Gardner who is stepping down at the next annual meeting.

Adrian Marsh, director of treasury and tax at Tesco, has been appointed finance director at DS Smith, the recycled packaging company.

08.00 In corporate news, Dixons Retail has announced a £115.3m pre-tax loss in its annual results, only marginally better than £118.8m last year. The owner of PC World and Currys has said underlying profits are much better - up 39pc - while group sales rose 4pc in the full year with like-for-like sales rising 13pc in the UK&Ireland. Sebastian James, chief executive, said he was "pleased with the progress we have made although I am, of course, impatient for us to achieve even more, even faster."

The digger hire firm Ashstead has announced an impressive 65pc jump in annual pre-tax profits to £215.5m from £134.8m last year. Revenues were up 19pc to £1.4bn and the dividend has more than doubled from last year to 7.5p. In an interview with the Telegraph two weeks ago, Geoff Drabble, chief executive of Ashtead, said good results would result in "life-changing bonuses" for hundreds of staff.

Lloyds Banking Group was found to have the largest individual shortfall of £7bn, more than double the £3.2bn Royal Bank of Scotland has been told it must raise, while Barclays will have to find an additional £1.7bn of new capital and Co-op Bank £1.5bn.

The capital raisings follow a stress test exercise on the lenders conducted by the Prudential Regulation Authority (PRA), which found a total capital shortfall in the British banking system of £27.1bn.

RBS was identified as having the largest capital shortfall of £13.6bn, however the bank has already put in place plans to raise £10bn.

Lloyds’s had the second largest overall shortfall of £8.6bn and currently has plans in place to raise an additional £1.6bn of capital this year.

The Chinese economy is under pressure from a refusal of its central bank to pump more liquidity into the system, causing interbank lending rates to spike to multiyear highs, and a slowdown in factory activity, which is according to a key survey has fallen to a nine-month low.

07.34 Here's a round up of the equity markets in Asia. In the Japanese markets, the Nikkei closed down 1.74pc, and the Topix fell 1.33pc. Seoul's Kospi fell 2pc overnight. Markets in China are still trading, with the Shanghai Composite down 2.17pc and the Hang Seng in Hong Kong down 2.56pc.

07.20 Asian markets took a tumble overnight, as investors digested comments from Fed chairman Ben Bernanke signalling a slowing down and end to QE3 by the middle of next year.